Court of Appeals Holds Judicial Estoppel Applies to Daughter's Claim of Ownership, Not to Claim of Unjust Enrichment or Quantum Meruit

Lauren Andros v Kathryn Andros

• COA Opinion Published: June 9, 2025 (Kelly, P.J., O'Brien, J. and Ackerman, J.)

• COA Docket No. 370930

• Macomb County Circuit Court

Holding: Judicial estoppel barred Plaintiff-Appellant's claims that depended on an ownership interest in the property, as she had previously denied such an interest in her bankruptcy petition. However, judicial estoppel did not preclude her claim for unjust enrichment or quantum meruit.

Facts: Plaintiff-Appellant wanted to purchase a home in 2014 but lacked sufficient credit, so she entered into an agreement with her mother, Defendant-Appellee, who bought a home in St. Clair Shores with the understanding that Plaintiff-Appellant would live there and reimburse Defendant-Appellee for the mortgage payments. They anticipated transferring the title to Plaintiff-Appellant once the mortgage was paid off, although the specifics of this commitment were disputed. Plaintiff-Appellant claims she made 96 payments, covering the balance through the lawsuit's filing, while Defendant-Appellee claims Plaintiff-Appellant missed about 40 payments. Plaintiff-Appellant also alleged that she made improvements to the home and paid for insurance, property taxes, and utilities.

In 2020, Plaintiff-Appellant considered refinancing the home to reduce mortgage payments, but Defendant-Appellee suggested filing for bankruptcy instead. Plaintiff-Appellant filed for bankruptcy and declared she had no legal or equitable interest in the property, and her debts were discharged. In 2022, the mother-daughter relationship deteriorated, and Defendant-Appellee served Plaintiff-Appellant with a notice to vacate. Plaintiff-Appellant then filed a lawsuit asserting claims for constructive trust, unjust enrichment/quantum meruit, breach of contract, quiet title, and injunctive relief. Defendant-Appellee raised judicial estoppel as a defense, and the trial court granted summary disposition in her favor, leading to this appeal.

Key Appellate Ruling:

Judicial estoppel applied to Plaintiff-Appellant's claims of ownership because she had previously disavowed any interest in the property during her bankruptcy proceedings, and the bankruptcy court had accepted that position.

The Court of Appeals found that Plaintiff-Appellant's unjust enrichment claim was not barred by judicial estoppel because it did not depend on her having an ownership interest in the house. The court compared this case to Spohn v Van Dyke Pub Sch, 296 Mich App 470; 822 NW2d 239 (2012). Both Spohn and the present case involve the application of the judicial estoppel doctrine in the context of bankruptcy proceedings. In the present case, the court applied judicial estoppel to bar Plaintiff-Appellant's claims that depended on an ownership interest in the property because she had previously denied such an interest in her bankruptcy petition. Similarly, in Spohn, the court applied judicial estoppel to bar Plaintiff's claims because she failed to disclose her interest in a potential lawsuit during her bankruptcy proceedings. The criteria for applying judicial estoppel in both cases are consistent. The court referenced the criteria established in Spohn, which include assuming a contrary position in a prior proceeding, the court's adoption of that position, and the absence of mistake or inadvertence.

The court further noted that Plaintiff-Appellant could seek compensation for her contributions to the property, as her claim for unjust enrichment or quantum meruit was valid once she was deprived of an interest in the property. Unjust enrichment and quantum meruit are equitable claims that do not depend on the claimant having a legal or equitable interest in the property. Instead, they focus on the fairness of the Defendant retaining benefits without compensation to the Plaintiff. In this case, Plaintiff-Appellant's claim for unjust enrichment was based on the amounts she spent toward ownership of the home and improvements made to it. These claims are valid because they seek compensation for contributions made without asserting ownership of the property. The court reasoned that unjust enrichment claims could only be pursued if Plaintiff-Appellant was denied any legal or equitable interest in the property. If she owned the property, she would not need compensation for improvements made to her own property. Therefore, the lack of ownership interest was a prerequisite for these claims, not a barrier.

While judicial estoppel barred Plaintiff-Appellant from claiming ownership, it did not prevent her from seeking compensation for her contributions to the property. The unjust enrichment and quantum meruit claims were valid because they did not rely on an ownership interest but rather on the fairness of compensating Plaintiff-Appellant for her contributions once she was deprived of any interest in the property.